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Netflix (NFLX, Financials) shares jumped 14.64% in pre-market trading on Wednesday, reaching $997.00 as of 8:49 a.m. EST, following the release of its strong 2024 financial results after the market close on Tuesday. The stock closed at $869.68 on Tuesday, up 1.35%.
Driven by significant membership rise and excellent content performance, the streaming behemoth projected $39 billion in revenue for 2024, a 16% increase from the year before. With an operating margin widening to 27%, operational income for the year jumped 50% to $10.4 billion. While net membership increases hit a record 19 million for the quarter, pushing total memberships to 302 million, fourth-quarter revenue climbed 16% year-over-year to $10.2 billion.
Up from $2.11 in the same time a year ago, earnings per share for the fourth quarter quadrupled to $4.27. The findings surpassed market projections and generated pre-market trading investor excitement.
Content highlights for the quarter included the Jake Paul vs. Mike Tyson boxing fight, which established a new record as the most-streamed athletic event, and the second season of Squid Game, which is on course to become one of Netflix's most-watched shows. On Christmas Day, Netflix also claimed record-breaking NFL viewing.
Reflecting 12%14% year-over-year growth, or 14%17% on a currency-neutral basis, Netflix projects revenue of $43.5 billion to $44.5 billion for 2025. Supported by predicted doubling of ad income and ongoing membership increase, the operating margin is expected to climb to 29%.
For $6.2 billion, Netflix bought 9.9 million shares in 2024 and approved further buybacks for 2025 at $15 billion. At $6.9 billion, free cash flow for 2024 was constant; for 2025, it is expected to be around $8 billion.
Maintaining its leadership in streaming interaction, the corporation is broadening its products with an eye toward live programming and games. With less than 10% of TV viewing accounted for in every market, Netflix pointed out great room for expansion.
This article first appeared on GuruFocus.